Tuesday, October 25, 2016

$1 Billion of Tax Money Thrown Into a Growing Deficit [Michigan Capitol Confidential]:
"Michigan lawmakers are proud of their fiscal prudence for putting an extra $1 billion into the school employee pension fund. But the extra state payments have been insufficient to pay even the interest on the debt, let alone catch up on the $26.7 billion of unfunded liabilities in the system.The state determines the amount of money the pension system needs each year based on an actuarial assessment that looks at how much is being earned in benefits by employees and how much the state still owes in pension debt.
This is different from Social Security and Medicare, where the government sets a contribution rate and leaves it unchanged.
The amount the state is supposed to pay for the school pension system has increased with the system’s growing unfunded liabilities.
The recommended inputs increased from $1 billion in 2009 to $2.2 billion in 2015, as unfunded liabilities increased from $12.0 billion to $26.7 billion.
(This is in addition to other contributions made to provide subsidized medical insurance to school retirees.)..."Read on!